Tatas keen to raise tech spends to $4 b in 5 years

Katragadda said India's largest conglomerate should target to up its technology investments to 4% of total group revenues, or more than $4 billion, in the next 3-5 years.Megha Mandavia | ET Bureau | May 12, 2017, 07:42 IST

Tata Group chairman N Chandrasekaran is keen on creating `smart' factories and consumer products with Internet of Things (IoT), said Gopichand Katragadda, group chief technology officer at Tata Sons. In an interview with Megha Mandavia, Katragadda also said India's largest conglomerate should target to up its technology investments to 4% of total group revenues, or more than $4 billion, in the next 3-5 years.

Edited excerpts:

What is N Chandrasekaran's mandate for Group Technology and Innovation Office (GTIO) that you are heading?

Chandra has a significant focus on IoT, or `Industry 4.0'. It is a gamut of technologies -harsh environment sensors, wireless communication, cloud and analytics. We have multiple group companies that are consumers and multiple group companies that are providers as well.

On a broader basis, Chandra has deep insights into customers and their needs. He said, during the Innovista event, that technology continues to become more and more important. He said you need to have technology or you will get obsolete.Tomorrow that will also not be enough, he said.Companies will have to look at what kind of data they have access to.

Data is the new oil. You have to see what data physical or digital systems are collecting, and what they can be made to collect. You have to see what insights you can get and what human health and comfort problem it can solve. Chandra will bring that focus.

Titan recently tied up with IBM Watson for analytics. Will you be looking at similar partnerships across group companies?

We are eager not to reinvent the wheel. But at the same time we don't want to depend only on partners. My role is to make sure we are generating sufficient intellectual property. We want to go beyond.

How will you monetise your innovations?

The best way to monetise is (to make sure) that we have patents to license out. If there is enough critical mass, you can launch a separate company.But if you are a company already into products, then the natural route will be to not license it but use it.

Does the Tata Group plan to increase research and development (R&D) spend from present quantum of 2.7-2.8% of total revenue?

Indian average is 1% including government spend. We, at Tata Group, are doing fairly well because of pockets -automotive, steel, and computing. We need to ensure that, in a wise manner, we look at increasing monetisation of this process. You need to ensure the current spend is bearing its result.It has to reflect in the market cap of the company. Then we will look at growing to global benchmark of 4% of R&D spends. We should target it. Once we have a good quality programme of this 2.8% spend, then we can get there (4% R&D spend).

What are the current and future focus areas for innovation at Tata Group?

The current focus is in the area of digital and computing. That is, moving towards automation of services. Then there is focus on materials.The direction we are moving is that Tata Steel will be a materials company. Tata Steel has a list of 20 materials it would like to be successful at. In the automotive area, today it is about lowering emissions. But the future is headed towards autonomous (driverless cars). Newer focus areas across the companies are sensors because they are required in IoT, nutraceuticals, (and) digitisation of wellness.

You have spoken on creating technology growth path for employees. Can you please elaborate?

There should be a pyramid for technology roles just like it is in the case of managerial roles. Salary should be equally good as if you were in a managerial position. One by one companies are taking it up.